In recent years, Bitcoin and other crypto assets have become established, and less of a fringe asset class. Indeed from around December 2017, values of digital assets spiked. This created wider awareness and futher investment momentum.
What form do the assets take?
Coins/ tokens contain unique codes which are held in a “wallet”. A “hot” wallet is connected to the internet and a “cold” wallet is not connected to the internet but tokens are stored on objects similar to a USB stick. A wallet is very much like a document folder and sometimes, people have a “paper” wallet with a written code. A paper wallet might be stored in a safe.
How to find crypto assets in a divorce?
We find Crypto assets in divorce cases in done in several ways. We look in mandatory disclosure for signs of a trading platform such as Coinbase, Bitfinex, Bittrex or Binance. These will show up in bank statements. We can then request through court the transaction history of the trading account.
Also we can check social media including twitter and facebook to see if there is any involvement with Crypto companies.
A spouse may themselves check in the safe to see if there is a “paper wallet”.
Finally, if any references are found, there are specialist crypto search companies that can trace historic transactions of different coins if they have been transferred out of the “wallet”. This helps to find those coins that might have been transferred prior to or during divorce and financial proceedings. The court can then step in and make further disclosure orders or even an injunction to freeze assets.
What is their actual value in a divorce case?
Coins should be valued in the same way of shares with regular updates and the courts are deciding cases now which confirm that Crypto currency assets are legal property. See for example Joint Liquidators of Torque Group Holdings Limited (in Liquidation) v Torque Group Holdings Limited (in Liquidation BVIHC (COM) 0031 of 2021 (2 July 2021). This should help further when dealing with assets of this nature in financial proceedings and divorce.